The Asian Development Bank (ADB) has expressed its
willingness to provide financial support for the study and preparing
feasibility report of the $3 billion Turkmenistan-Afghanistan-Pakistan
cross border gas pipeline project recently.
This 1500km long pipeline project for transportation
of natural gas from Turkmenistan to Pakistan has been a talking point in
the energy sector for the last many years. The delayed project mainly
due to political disturbances in Afghanistan has already resulted in
cost escalation from $2 billion to $3 billion during last 5 years.
Earlier a consortium comprised of International oil and gas companies
and donor agencies had also agreed to provide project financing, however
this important project was shelved due to disturbed conditions in
Afghanistan which is the corridor passage for this gas pipeline from
Turkmenistan to Pakistan.
This project is getting importance with every passing
day in the face of growing demand of natural gas which is relatively
cost effective and much cheaper than the conventional fuels used for
transportation or power generation sectors.
On one hand, the ever-increasing petroleum prices in
the international market impairing the efforts of the manufacturing
sector for producing exportable items at competitive price, while on the
other hand the domestic consumers are also making hue and cry over
exorbitant power tariffs in Pakistan. The adequate availability of the
natural gas to replace furnace oil used for power generation is the only
way out to cut down the cost of power generation in Pakistan. If this
important gas pipeline projects gets materialized, things would
certainly improved in a big way to bring down cost of power generation
as well as other sectors including transportation cost in Pakistan.
There were reports that the ministry of petroleum is determined to
achieve the target of shifting from oil to gas within next one year.
This precious target however demands for speedy development of local gas
fields and their integration with the gas pipeline network for the
regular supplies to the relevant consumers.
The ADB is however willing to extend an aid of $1.5
million to the three countries to carry out the study. Pakistan,
Afghanistan and Turkmenistan have already signed a memorandum of
understanding in Islamabad in May to carry out the study.
Pakistan has a unique geographic and strategic
location in Asia. It is situated at the crossroads of West, Central and
South Asia and provides access to the warm waters of the Arabian Sea.
With the fast growing markets of countries of South Asia and East Asia,
the availability and security of energy supplies to these countries is
critical for their economic development. Due to its strategic location
and the strength of its well-developed energy sector, Pakistan is vying
to emerge as a leading transit country in international energy trade in
Asia. In this respect, three transmission pipeline projects are under
consideration of the government. These projects include
Turkmenistan-Afghanistan and Pakistan pipeline, Iran-Pakistan and India
pipeline and Qatar-Pakistan pipeline. In addition, a storage and export
terminal, combined with export oriented refineries, on Pakistan's
Arabian Sea coast at Gwadar can provide a convenient outlet that would
be vital for the Central Asian countries if their oil was to find
It is amazing to note that India was confronted with
chronic energy shortage especially the natural gas to overcome its
energy problems. As soon as the normalcy returns to the bilateral
relations of the two countries, India will be the largest buyer of the
natural gas being brought from Turkmenistan.
On the local front, Pakistan has to find a way out
for replacement of the costly crude, which alone cost around a
billion-dollar per year to the economy every year. The spiraling crude
prices have always been grappling with the issue of domestic product
prices. These prices have to relate to international prices and as a
result, they have been periodically increased. In order to get rid of
this problem, Pakistan has not option but to completely switch over from
oil to gas in all respective sectors especially the sectors like power
generation, transportation and other areas of bulk energy consumption.
To encourage use of Compressed Natural Gas (CNG) especially in transport
sector conversion of diesel engines of the vehicles into CNG system is
gradually increasing in Pakistan. All the major oil market companies
have already been engaged in CNG business which, noticeably reflects in
the fast emerging CNG filling outlets in all major cities of the
country. The multi-facet advantages of the use of CNG in place of oil in
the transport sector have their own charm for the managers of the
One of the major incentives in this plan is that the
natural gas is 43 per cent cheaper than the fuel oil being used by the
bulk consumers such as power generation and transport sectors.